The Australian Automotive Dealer Association (AADA) is calling on the federal government to pause the introduction of new vehicle brands into Australia, warning that the growing number of manufacturers is putting pressure on dealership profitability and consumer support.
The AADA, which says it represents more than 3,900 franchised new vehicle dealers across Australia, says the rapid expansion of the market is contributing to financial losses, aggressive stock targets and unsustainable competition.
The AADA says the number of brands competing in Australia rose from 39 in 2021 to 67 in 2026. Keep the 2027 forecast if separately sourced.
AADA CEO James Voortman said the industry’s recent financial performance highlighted the pressure facing dealerships.
“This is a clear warning that the commercial settings underpinning our industry are becoming unsustainable,” he said. “The sheer number of brands arriving in Australia at a rapid pace is having profound consequences for Australian consumers and businesses alike.”
The AADA said the new car retail sector recorded its first quarterly loss since the global financial crisis in the September quarter of 2026.
Concerns over dealership viability and consumer support
The association says the growing number of brands could also create risks for consumers, including faster vehicle depreciation, delays in parts supply and longer repair times. It also raised concerns about the availability of servicing and parts if a manufacturer exits the Australian market.
While acknowledging that competition and choice can benefit consumers, Mr Voortman said the market could not sustain unlimited growth.
“Pushing excessive stock onto dealers is fuelling a race to the bottom,” he said. “Aggressive discounting erodes margins and devalues vehicles while dealers carry the financing costs and risk of unsold vehicles.”
The AADA is seeking a pause on new vehicle brands entering Australia as part of a broader set of 10 proposed measures. Other recommendations include more realistic sales targets from manufacturers and financial relief for dealers carrying excess stock.
Calls for industry-wide action
Mr Voortman said proposed competition safeguards needed to reflect the changing structure of the automotive industry.
“Competition safeguards matter, but their application must recognise the realities of an industry undergoing rapid structural change,” he said.
“Dealers invest in local jobs, apprenticeships, technical training and the servicing and warranty support motorists rely on. Governments, manufacturers and suppliers all have a stake in keeping that network viable.”
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